Sec. Richardson praises OPEC action
US Energy Sec. Bill Richardson said the Organization of Petroleum Exporting Countries decision to raise production more than 700,000 b/d was 'a positive, though modest, step that we hope will lead to more stable oil markets and lower [fuel] prices at the pump.'
Washington, DC�US Energy Sec. Bill Richardson said the Organization of Petroleum Exporting Countries decision to raise production more than 700,000 b/d was �a positive, though modest, step that we hope will lead to more stable oil markets and lower [fuel] prices at the pump.�
Richardson said Mexico�s announcement that it also would increase production 75,000 b/d through the third quarter would help US consumers.
He said, �Over the last few months, we have been asking OPEC governments to keep an open mind about production increases and have stayed in close touch with the government of Mexico.
�High demand and low production levels have contributed to tight crude supplies, and worldwide stock levels have not been increasing as rapidly as they should to ensure continued supplies throughout the remainder of the year.�
Richardson said although there is more oil on the market now than prior to OPEC�s March meeting: �We remain concerned that supply be sufficient to meet demand and build stocks, both worldwide and here [in the US], so that the market can operate with a comfortable margin of safety for the remainder of the year.
�Domestically, we are facing very high demand levels for gasoline, and our refineries are operating at 96% utilization rates.�
Sen. Charles Schumer (D-NY) said OPEC�s action �is a disappointment that amounts to little more than a drop in the bucket. At best, this small increase in production could keep prices at the pump from rising higher, but it certainly will not reduce gasoline prices this summer or heating oil prices next winter.�
Schumer said a year of tight oil supplies has left US oil inventories �dangerously low� and the government should replenish stocks by releasing Strategic Petroleum Reserve crude.